Economist praises 'intelligent' PM

Embattled Gordon Brown has won some backing from a Nobel Prize-winning economist who said the British economy looked to be faring the best in Europe.

Princeton University economics professor Paul Krugman praised Mr Brown's handling of the banking crisis and his economic policies as "intelligent".

"I think the UK economy looks the best in Europe at the moment," he told The Observer.

He added: "The fact of the matter is, Britain did manage to stabilise the banking system. If the Government can hold off having an election until next year, Labour might be able to run as 'the people who brought Britain out of the slump'."

His comments come in the wake of predictions that the UK might be past the worst of the recession.

One respected think-tank said last week the downturn had already ended, while other key financial data suggested that both the manufacturing and service sectors grew for the first time in a year during May.

The pound soared against the dollar and the euro over the past few days as investors bought back into sterling on the back of the upbeat news.

Mr Krugman was awarded the Nobel Prize for Economics last year "for his analysis of trade patterns and location of economic activity".

Meanwhile, more than half of voters think Gordon Brown staying on as Prime Minister is harming Britain, a YouGov poll for the Sunday Times found.

It said 51% of people agreed with the statement that "Gordon Brown's continuing presence as Prime Minister is damaging the country". Some 27% disagreed. The poll gave the Tories 40%, Labour 24%, Liberal Democrats 18%.